News 2019September 2018
The government of Kazakhstan has invited international investment banks to pitch for roles in listing the state oil company KazMunayGaz (KMG) in London, five sources familiar with the matter said. Sending “requests for proposals” to investment banks marks progress in the long-awaited privatisation process of the resource-rich Central Asian state, which also includes selling shares in the country’s telecom and railway operators and other companies. In a bid to develop the country’s domestic equities market, the government also wants shares of newly-privatised firms to be listed on its new Astana bourse.
One of the sources said the exchange was not yet in a position to do that, adding that in his opinion any listing of the state oil company would take place no sooner than the second half of 2019. Kazakhstan was hit hard by the fall in world oil prices from a high of $115 in June 2014 to around $80 a barrel today. Its privatisation push aims to reduce the presence of the state in the economy to 15 percent by 2021.
KMG did not respond to a request for comment and its main shareholder, sovereign wealth fund Samruk-Kazyna, declined to comment. Sources also declined to comment on the company’s potential valuation. KMG accounts for 28 percent of the total crude oil and gas condensate production volume in Kazakhstan and 16 percent of natural and associated gas. It has more than 84,000 employees.
In July deputy head of Samruk-Kazyna Alik Aydarbayev said Kazakhstan planned to conduct a secondary share issuance for telecom operator Kazakhtelecom by the end of the third quarter and an initial public offering of uranium producer Kazatomprom in the fourth quarter.
In 2017, Berik Beisengaliyev, managing director for assets optimisation at Samruk-Kazyna told Reuters flagship carrier Air Astana and Kazatomprom were slated to list first, followed by Samruk Energy and KMG in a second wave, then Kazpost and railway operator Kazakhstan Temir Zholy in a third wave.
Although KMG is listed already in Almaty, it has no free float and no actual IPO took place. It was listed to facilitate the sale of a 10 percent stake to the central bank in 2015.